Accounting and statecraft in China: Accrual accounting for effective government rather than efficient market

Abstract

This paper explores the governmental rationales underlying China’s recent decision to adopt accrual accounting in its public sector. It aims to illustrate an extended role of accrual accounting in facilitating a relationship between the state and its market. Whilst neoliberal ideas of efficiency are seen to weaken state institutions under the logic of the market - with the widespread adoption of accrual accounting in public sectors being a model case, such rationalities have, on the contrary, been deployed to refine an understanding of a stronger state in China. Rather than being a mere effect of ideological reception around the idea of market efficiency, accrual accounting methods have been used to support particular possibilities for statecraft and government in China. Here, accounting offers a mechanism through which the Chinese state can strengthen governing efficiency, overcoming its major institutional weakness: the enduring conflict between political centralisation and effective local-level governance. Attesting to the diverse rather than monolithic conditions and processes of global NPM accounting reform, this paper highlights the power of accounting in facilitating the state’s different enactment of neoliberal ideas and governmental technologies, as shown in both China and beyond.